Acquisition of Pepco Holdings, Inc. by Exelon Corporation May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Pepco Holdings, Inc. (NYSE: POM) by Exelon Corporation (NYSE: EXC). On April 30, 2014, Pepco and Exelon announced the signing of a definitive merger agreement pursuant to which Pepco shareholders will receive $27.25 in cash for each share of common stock.
Is the Proposed Acquisition Best for Pepco and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Pepco is undertaking a fair process to obtain maximum value and adequately compensate Pepco shareholders.
As an initial matter, the $27.25 merger consideration represents a premium of just 19.6% based on Pepco’s closing price of $22.79 on April 29, 2014. This premium is significantly below the average one day premium of over 25% for comparable transactions in the last three years. Further, on February 28, 2014, Pepco released its financial results for the fourth quarter and fiscal year 2013, reporting a 70.6% increase in net income from $34 million in the fourth quarter to $58 million for the same period in 2012. In addition, the Pepco’s earnings per share for the fourth quarter 2013 increased 53% from $0.15 to $0.23 in the same quarter 2012. Pepco also announced that in 2013, Pepco Energy Services entered into $66 million in energy efficiency contracts, an increase of $57 million compared 2012.
Given these facts, Robbins LLP is examining the Pepco board of directors’ decision to sell the company to Exelon. Pepco shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Pepco shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.